Heavy equipment such as loaders, excavators, and lifts play a vital role in any large construction project. And because of that, investing in good equipment is a major decision that any company must thoroughly think about. It affects many aspects of the project, particularly construction operations and budget.
But investing in good machinery isn’t always buying them. You can also rent construction equipment, especially if you don’t see your company needing them for the long term. Here’s how to determine whether you should rent your equipment or buy them from equipment rental and sales companies.
Factors to Consider
Since heavy equipment is an important investment, you should give some time to consider the factors that can influence your decision. Conducting a cost-benefit analysis can help you paint a better picture of your current situation. Here are some of the factors to think about:
- Project’s budget
- Frequency and duration for which the equipment is needed
- Urgency of having the equipment
- Cost of buying a new machine vs estimated rental payments for the machine
- In-house capacity to service and maintain the equipment
- Cost of transportation from your storage facility to the project site
- Estimated cost of maintenance
Benefits of Buying Equipment
A good general rule of thumb when it comes to buying equipment is that if you’re going to use the machine for 60-70% of the project, purchasing it is a better option. Here are some benefits when you own the heavy equipment and machinery yourself:
1. Availability of the Machine – Rental companies work with multiple clients and sometimes, their machines wouldn’t be available immediately when you need them. But when you own the heavy equipment and machine, it will easily be available to you. You don’t have to wait for any other renting company to approve your rental. You’ll be ready at all times to handle any emergency and last-minute jobs.
2. One-Time investment – Though buying a new machine has a higher upfront cost, it can actually save you money in the long run. The longer you rent out your machines, the cost of rental can add up quickly.
3. Easy To Upgrade – if you own your heavy machinery, you can upgrade it the way you like. If a new technology comes in, you can upgrade the computer system of the machinery. Parts can be easily changed or removed without worrying about the rental company.
4. Machine Maintenance Under Control – You can always keep the maintenance in check as your equipment gets to be checked by your mechanics and engineers. You can easily inspect the machine regularly. That way, you’ll know and spot any damage and repair them before starting a project.
5. Good Impression on Clients – Having new equipment can help show your professionalism to your clients. Client companies would often prefer working with construction businesses that own their equipment. This is because it only means that the project can start immediately.
Benefits of Renting Equipment
Meanwhile, if your operation would require you to use your machines more often, leasing or renting the machine can be a better option. Here are some of its benefits.
1. No Upfront Investment – Heavy equipment such as skid loaders, excavators, and others are an expensive capital cost that requires careful planning. Some businesses would even have to require a few years of planning and saving just to purchase one machine. Rental is a good way to go if you do not have enough funds for an initial investment.
2. Avoid Operational Expenses – With renting machines, maintenance, storage, and transportation costs are all shouldered by the rental company. Rental can save you from worrying over transportation from site to site since you can have it delivered to the location. There’s no need to construct permanent large storage spaces whenever your equipment is not needed. Plus, maintenance can easily be taken care of by the rental service provider.
3. No Worries When It Comes to Taxes – Rental payments are considered deductible expenses whereas purchased equipment is taxed that depreciate over time. There’s also a chance that you may get some sort of tax benefit when it comes to rentals depending on the nature of your business.
4. Environmental and Legal Compliance – If you rent your machines, the task of keeping the machine working under compliance falls on the shoulders of the rental service provider. This will free you from any worry and would let you focus on your business.
5. Chance to Test Out a Machine for a Preview – If you’re not sure if the machine is the right one for you, renting allows you to try it out first. Testing it out first allows you to make a better decision.
Those are the benefits of renting vs buying equipment. Whether you choose to rent or buy new machines from reputable equipment rental and sales companies, the decision will be yours to make.